Californians hit hardest by fuel costs
California motorists saw the worst of a nationwide surge in gasoline prices during the last week, the government said Monday, bringing fuel prices to the highest level since early August and reflecting record crude oil prices.
The California price for a gallon of self-serve regular gasoline averaged $3.143, up 9 cents from a week earlier, according to the Energy Department’s weekly survey of gasoline stations. The U.S. average was $2.823 a gallon, up 6.1 cents.
At this time last year, California’s average was 66 cents lower and the U.S. average was 62 cents less.
Consumers have not enjoyed the declining gasoline prices that normally occur after the summer driving season when fuel demand drops off.
Last year, the national average price of gasoline fell by 52 cents a gallon between the Labor Day holiday in early September and the third week of October, the Energy Department said. This year, gasoline increased by 3 cents during the same period.
High crude-oil prices, which account for about half the cost of making gasoline, are helping to keep pump prices from falling.
Oil climbed more than $10 a barrel this month on winter supply concerns to hit a record $90.07 last week during intraday trading on the New York Mercantile Exchange. The higher crude-oil costs are eventually passed on to consumers at the pump.
Oil for delivery in November fell $1.04 to $87.56 a barrel Monday in New York amid concern about economic growth and on profit-taking ahead of the November contract’s expiration, despite doubts about a possible cease-fire between Turkey and Kurdish rebels in Iraq.
Other energy futures followed crude oil lower. Gasoline for November delivery fell 3.53 cents to $2.1334 a gallon, and November heating oil fell 1.97 cents to at $2.3109 a gallon.
November natural gas fell 15 cents to $6.891 per 1,000 cubic feet. Natural gas prices are under pressure from unseasonably warm temperatures in the North and the Midwest and a forecast that this winter would be warmer than normal.
Predictions about the future of oil prices range from $60 to $120 a barrel, depending on whether the analyst believes forecasts that oil supplies will tighten amid growing demand in the fourth quarter. Many analysts believe that prices have risen sharply in recent weeks because of speculative investing. Indeed, data released Friday showed that speculative buying of oil contracts increased last week.
But other analysts contend that the fundamentals clearly support higher prices.
“The bashing of speculators in the oil market by uninformed and biased watchers of the energy prices and energy markets is the new sport for those that still are in denial about the real fundamentals facing the market,” wrote Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, in a research note.
The demand side of the oil fundamentals equation could be affected by an economic slowdown. Some investors worry that Friday’s sharp drop in the stock market reflects an overall cooling in the economy.
In the Energy Department’s latest weekly price survey, the region with the most expensive gasoline was the West Coast, up 8.6 cents to $3.065 a gallon. Among major cities, San Francisco had the highest gasoline cost at $3.195 a gallon, up 8.2 cents.
The Gulf Coast states had the lowest price by region at $2.703 a gallon, up 6.1 cents. Houston had the cheapest pump price at $2.585 a gallon, up 4 cents.
The average price that truckers paid for diesel fuel jumped 5.5 cents to $3.094 a gallon, up 57 cents from a year earlier and the highest level in two years.
The West Coast had the most expensive diesel at $3.323, up 9.4 cents. The Gulf Coast states had the most affordable diesel at $2.994, up 5.3 cents.
